Fed Hikes Federal Funds Target

The Federal Reserve Board modified the statement accompanying its expected decision to raise the federal funds target rate by 25 basis points (to 3.25%), but in general there seemed to be little change in the committee's rate outlook.There is "no signal from the Fed that they are contemplating stopping," said Stephen Stanley, chief economist of RBS Greenwich Capital. Mr. Stanley said the Federal Open Market Committee, the Fed's monetary policy-making panel, made two changes to its statement. One indicated that, despite past energy price increases, economic expansion "remains firm," and another deleted a reference to "pricing pressures" in conjunction with inflation concerns, he said. This means that "the Fed is more confident about growth and less worried about inflation," according to Mr. Stanley.